Emaar rules out turning $62 mln Amlak loan into equity

Dubai’s Emaar Properties on Thursday ruled out converting a 230 million ($62.6 million) dirham loan to mortgage affiliate Amlak into equity, a day after it said it may raise its stake in the lender.

“There was an option earlier considered involving the longer term loan … however, other better and viable options have been identified, which are now being considered and discussed,” Emaar, builder of the world’s tallest tower Burj Khalifa, said in a statement.

Emaar, which has a 48 percent stake in Islamic mortgage lender Amlak, did not specify what the options were.

Emaar’s chairman Mohammed Alabbar had said on Wednesday the United Arab Emirates’ largest developer may raise its stake in Amlak adding it had not decided by how much.

“Amlak is facing a lot of issues and as an analyst covering Emaar, I would prefer Emaar to write down its investment in Amlak and recover its debt,” said Majed Azzam, AlembicHC real estate analyst.

“If Emaar took control, it would have to sell assets and this isn’t something Emaar should be dealing with,” he added.

Alabbar said on Wednesday Emaar may take provisions related to Amlak in the first quarter of 2011.

Shares in Amlak, and its rival Tamweel, have not traded since 2008 when the UAE government said it aimed to merge the two.